TAIPEI — With the market for electronic book readers set to take off, things are looking up for a little-known Taiwanese company that will probably supply most of the “e-paper” they use.
The company, Prime View International, said this summer that it would pay about $215 million to acquire E-Ink, which owns the technology for displaying text in the most popular readers, including Amazon’s Kindle and Sony’s Reader.
The company, Prime View International, said this summer that it would pay about $215 million to acquire E-Ink, which owns the technology for displaying text in the most popular readers, including Amazon’s Kindle and Sony’s Reader.
Prime View, often referred to as P.V.I., recently sweetened its offer and says it hopes to close the deal by the end of the year. It already manufactures e-reader display modules for the Kindle and the Reader.
“E-Ink is by far the leader” in the field, said John Chen, director of the display technology center at ITRI, a government-financed technology incubator in Taiwan. “P.V.I. is going to strengthen its leadership in the next year or two, before anyone else can catch up.”
Demand for e-paper is expected to rise, with Amazon expanding the availability of the Kindle to Europe and the U.S. book retailer Barnes & Noble creating its own e-reader to compete with Amazon and Sony.
The availability of more content and the ability to download material wirelessly has fueled demand for the devices.
DisplaySearch, a market researcher based in Austin, Texas, forecasts the global market for e-paper, including e-paper used in e-books, to hit $5.9 billion by 2015, from $400 million this year.
This is not the first time Prime View has jumped into a growing market early. It became the first Taiwanese maker of flat-panel screens in 1994. Ten years later, in a crowded market dominated by the likes of Samsung and LG Display, it decided to focus on specialty products like custom displays for medical devices.
In 2005, it acquired Philips Electronics’ e-
paper display unit, in an early bet on the industry.
“All the big companies like Samsung weren’t so interested in this market,” said David Hsieh, president of DisplaySearch’s Taiwan branch. “So Prime View found a good niche.”
It was also a good fit considering Prime View’s pedigree. The company is a subsidiary of Yuen Foong Yu Group, a Taiwanese paper and pulp company. The group started making toilet paper and paperboard as early as 1939 and began producing coated paper in the 1950s with Japanese technology, according to its Web site.
“All the big companies like Samsung weren’t so interested in this market,” said David Hsieh, president of DisplaySearch’s Taiwan branch. “So Prime View found a good niche.”
It was also a good fit considering Prime View’s pedigree. The company is a subsidiary of Yuen Foong Yu Group, a Taiwanese paper and pulp company. The group started making toilet paper and paperboard as early as 1939 and began producing coated paper in the 1950s with Japanese technology, according to its Web site.
Now, one of Taiwan’s first mass producers of paper looks set, through a subsidiary, to become the world’s first mass producer of e-paper.
Analysts say Prime View’s production capacity, which includes factories in South Korea it acquired in 2007, make it the only e-paper company with the scale to meet booming global demand. And the ownership of E-Ink will mean they have no intellectual property issues to overcome and can make e-paper “from head to toe,” Mr. Hsieh said.
The company has its critics. Jeff Pu, an expert on the flat-panel industry in Taiwan, says Prime View has too much exposure in conventional liquid crystal displays. Prime View says that about half of its business concerns e-paper products.
A demand dip could be punishing, said Mr. Pu, who currently analyzes the mobile industry at Fubon Securities in Taipei. For example, he said, Prime View executives told analysts in April that its Korean factories were operating at 30 percent of capacity in the first quarter of this year, and that 65 percent was “break-even level.”
Mr. Pu also sees a price war coming, as AU Optronics, LG Display and others enter the e-paper market. AU Optronics has the most promising e-paper technology after E-Ink, the “microcups” technology owned by its subsidiary Sipix. Prime View will have to cut its prices after it loses its first-mover advantage, Mr. Pu said.
For now, Prime View is shrugging off such predictions. A company spokesman, Stephen Chen, conceded that capacity was low at the company’s Korean factories early this year but said that was because of the unusually bad economic downturn.
Mr. Chen said the company did not plan to license the E-ink technology to others and declined to comment on whether it might make its own e-reader.
“So far, for mass production and quality, E-Ink is the first priority for customers,” Mr. Chen said. “So I think we’ll keep the leading edge for some time — a few years is certain.” Read the original article here http://www.nytimes.com/2009/11/09/technology/09iht-epaper.html?hpw=&pagewanted=print
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